Any company which has grown at Temasek’s phenomenal rate should be making increasing profits. Temasek isn’t.
1. In FY 2007, Temasek’s revenue and total profit were $74.6 billion and $13 billion respectively. Nine years later, although revenue has increased to $101.5 billion, total profit fell to $12.6 billion.
2. In FY 2008, net profit doubled to $18 billion. Question: Was there a massive sale of state assets which contributed to the profit spike? Some clarification needed here.
3. For profit to spike 100% ($9 bil to $18 bil) in FY 2008 and plunging 66% ($18 bil to $6 bil) the following year, the only conclusion is Temasek must have taken excessive investment risks. Stable businesses and non-speculative investment do not produce such volatile, see-saw returns.
This repeated 2 years ago when profit increased $2 billion in FY2015 but fell $5 billion in FY2016. And we are not even in the midst of a financial crisis.
4. FY 2016 net profit of $8 billion is the third lowest during the decade. Almost all local GLCs are profitable and the total net profit of 5 largest Singapore companies** already amounted to some $6.2 billion. Including all other GLCs, total net profit should have easily amounted close to $8 billion. Doesn’t this suggest the net profit of all its foreign investments is negligible or close to zero? Or are there billion-dollar losses in unlisted GLCs?
5. How could profits to be lower/stagnant when its portfolio value has increased from $164 billion to $242 billion? Are unlisted assets properly valued?
Would appreciate a proper clarification, ie not selective disclosure, from Temasek.
**5 largest companies – Singtel (51%), DBS (30%) , PSA, STT and S Power (100%)